The Downing Healthcare EIS is an EIS Knowledge Intensive Fund, investing in a minimum of five healthcare and life sciences companies.
Your capital is at risk and you may not get back the full amount you invested. EIS investments are long term and high risk. Tax reliefs are subject to change and depend on personal circumstances. If you're unsure about your tax status you should seek advice from a financial adviser. Please read full details of the risks here.
What do I need to know before investing?
Where is my money invested?
With its world-leading research institutes, often fronted by the so-called “Golden Triangle” of Oxford/Cambridge/London and amply demonstrated by the development of the Oxford/AstraZeneca Covid-19 vaccine, the UK already has in place a leading ecosystem to foster innovation within healthcare and life sciences. We believe that, with further funding, the UK can continue to cement its place as a leading global healthcare and life sciences hub.
Our aim is to invest your money in a minimum of five companies. As these companies scale-up we can use funding from other products, such as Downing VCTs, to provide follow-up finance to help boost future growth.
What are the risks?
Investing in an EIS is for the long term, high risk and not suitable for everyone, so we recommend seeking financial advice before investing. As with all investments, the Downing Healthcare EIS has risks that you should be aware of and comfortable with before you invest.
- The value of your EIS investment can go up and down so your capital is at risk.
- EIS companies can lose their qualifying status which can affect your tax reliefs.
- EIS tax benefits are not guaranteed, are subject to change and apply only if you hold your shares for a minimum of three years.
- EIS qualifying businesses are at an early stage in their development and are therefore high risk. It can be hard to sell your EIS shares so you should be prepared to hold them for four - eight years.
- Your Healthcare EIS portfolio will consist of a minimum of five companies and is focused on the healthcare and life sciences sector so there is relatively limited diversification.
- The past performance of an EIS is not a reliable indicator of future results.
Please note this is only a brief overview of the risks involved with investing in an EIS fund. Please read full details of all the risks here before investing.
What are the charges?
Charges paid by the investor will reduce the amount of EIS income tax relief you can claim. Charges payable by the company can reduce the value of your portfolio. VAT will be charged as applicable.
1% This is based on the amount you invest and is an upfront charge to the investor. Initial charge
3% This is based on the amount you invest and is an upfront charge to the investor. 2% is usually paid to your intermediary, unless otherwise indicated on your application form. Annual charge
2% p.a. +VAT The first two years of the annual charge is taken up front from the investor, with any subsequent fees accrued and taken from exit proceeds. This charge is for the costs of managing the Downing Healthcare EIS (including custodian and nominee fees, bank charges and reporting to investors). Annual charge
2.5% p.a. + VAT The first two years of the annual charge is taken up front from the investor, with any subsequent fees accrued and taken from exit proceeds. 0.5% is usually paid to your intermediary for the first four years unless otherwise indicated on your application form. This charge is for the costs of managing the Downing Healthcare EIS (including custodian and nominee fees, bank charges and reporting to investors). Performance fee 20% + VAT Based on the returns above £1.00 for each £1.00 invested. Payable only when you receive cash proceeds equal to the total you invested in the EIS companies. Arrangement fee up to 3% This is based on the amount available for investment into EIS companies and is charged on completion of an investment to each EIS company.
What happens once I’ve invested?
We send you an acknowledgement letter, typically within seven business days of receiving your application.
We aim to invest funds into EIS-qualifying knowledge intensive companies within 6 to 12 months of the fund closing.
Once we have invested more than 90% of the funds, we will apply to HMRC for an EIS5 certificate (to claim 30% income tax relief), which we will send to you as soon as it is received. Unlike an unapproved fund, you will not receive any EIS3 certificates for your investments and will submit your EIS5 to HMRC if required.
Every six months, we'll send you a valuation statement.
Along with your valuation, we'll provide half-yearly reports with details of how each portfolio company is performing. These reports will cover the six-month periods to 30 June and 31 December.
When can I exit my EIS investment?
Exit opportunities always depend on the growth of the business and current market conditions.
We aim to give you the opportunity to exit between four and eight years from the date your shares were originally acquired, but there are no guarantees.
It’s important to understand that EIS funds are long-term investments and, for the majority of our portfolio companies, the investment lifetime is likely to be closer to eight years.
Exit opportunities arise mainly when our portfolio companies are acquired by other businesses looking to expand their operations, although some exit through market flotation.